Chewy Stock Struggles Despite Strong Business Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 03 2026
0mins
Source: Fool
- Strong Performance: Despite Chewy's stock plummeting 50% over the past year and losing a third of its value in 2026, the company continues to forecast revenue growth of 8% to 9%, demonstrating its resilience and potential.
- Predictable Business Model: With 84% of sales coming from its autoship program and 85% from food and pet medications, Chewy has established a recession-resistant business model that ensures a steady revenue stream.
- Margin Expansion Goals: Chewy aims to increase its EBITDA margin from 5.7% in fiscal 2025 to 10% by leveraging automation and artificial intelligence to enhance efficiency, which is expected to drive future profitability.
- Undervalued Market Valuation: Despite Chewy's robust growth and highly recurring business model, its forward P/E ratio stands at just 13.7 times, highlighting its leadership position in the industry and future growth potential, especially when compared to the debt-laden Petco.
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Analyst Views on CHWY
Wall Street analysts forecast CHWY stock price to rise
20 Analyst Rating
17 Buy
3 Hold
0 Sell
Strong Buy
Current: 20.600
Low
42.00
Averages
47.06
High
52.00
Current: 20.600
Low
42.00
Averages
47.06
High
52.00
About CHWY
Chewy, Inc. is an e-commerce business geared toward pet products and services. The Company’s products consist of pet food and treats, pet supplies and pet medications, other pet-health products, and pet services. It serves its customers through its retail websites, and its mobile applications and focuses on delivering customer service, competitive prices, convenience, including Chewy’s Autoship subscription program, and a range of pet food, treats and supplies, and pet healthcare products and services. It partners with approximately 3,200 of the brands in the pet industry, and it creates and offers its own private brands. It owns a number of trademark registrations and applications in the United States and in foreign jurisdictions. These trademarks include American Journey, Blue Box Event, Careplus, Chewy, Chewy.com, Chewy Vet Care, Dr. Lyon’s, Frisco, Goody Box, Onguard, PetMD, PracticeHub, Tiny Tiger, True Acre Farms, Tylee’s, Vibeful, and The Zoo.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Ad Spending Reallocation: As the market stabilizes, advertisers are beginning to reallocate budgets, particularly those who had cut spending during periods of macro uncertainty, which will provide positive demand signals for platforms reliant on advertising revenue, fostering overall business growth.
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- Stock Price Fluctuation: As of the afternoon of June 24, 2026, Chewy's stock price rose by 2.12%, but the management's adjustment in expectations could negatively impact the stock price, increasing market uncertainty.
- Market Reaction: Investors may feel disappointed with Chewy's growth outlook, leading to increased stock price volatility in the short term, which could affect the company's market capitalization and financing capabilities.
- Need for Strategic Adjustment: In light of the lowered growth expectations, Chewy may need to reassess its market strategies and operational models to adapt to the changing market demands and competitive landscape.
See More
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- Investment Advisory Warning: With Chewy not being recommended by The Motley Fool Stock Advisor, analysts highlight that there are currently 10 stocks deemed better investment options, which could diminish Chewy's attractiveness to investors and affect its market position.
- Historical Performance Comparison: Historically, investments in Netflix and Nvidia yielded returns of 382,359% and 1,201,390% respectively when recommended, while Chewy's absence from such lists suggests insufficient future growth potential, potentially influencing investor decisions.
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